EasyJet Boosts Capacity as Travel Rebound Gathers Pace
EasyJet Plc said it will boost capacity to about 70% of 2019 levels this quarter, as the easing of travel restrictions in the U.K. triggers a surge in bookings.
The Luton, England-based discount carrier generated positive cash flow in the peak summer months and losses halved compared with a year earlier, according to a statement on Tuesday. Bookings have soared to places like Egypt and Turkey and capacity to the Canary Islands is at 140% of 2019 levels for the U.K. school holidays later this month.
“We have seen city breaks beginning to return alongside growing demand for leisure travel from customers looking for flights and holidays to popular winter sun destinations,” said EasyJet Chief Executive Officer Johan Lundgren.
EasyJet got a late start to summer, flying at about 58% of 2019 levels for the months of July, August and September, as its home base in the U.K. lagged behind countries in the European Union in loosening travel rules. Now it’s looking to capture pent-up demand and seize opportunities for growth, even as the industry enters the slower winter season.
Capacity gains will continue in 2022, Lundgren said on a conference call. EasyJet will look to acquire take-off and landing slots at constrained airports, and isn’t ruling out the possibility of acquisitions, he said.
“The increased steer on capacity bodes well for the winter season,” Bernstein analyst Alex Irving said in a note.
Still, the airline said ticket prices remain low as airlines add more capacity, while the industry is also under pressure from higher oil prices, Lundgren said.
The shares traded 2.5% lower as of 9:10 a.m. in London, having earlier risen as much as 1.7%.
EasyJet is 55% hedged on jet fuel for the year through September 2022 at about $500 per metric ton, the airline said, as a rise in oil prices drove spot prices to $760.
After months of criticism from the airline industry, the U.K. last week allowed easier access to many destinations, while removing some of the testing requirements for fully-vaccinated people. EasyJet has been held back by a slower reopening of U.K. travel amid constantly changing travel curbs, even as rivals Ryanair Holdings Plc and Wizz Air Holdings Plc rapidly added on capacity.
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